FAMILIES will be paying an average of €700 extra to live in their own homes when water and property charges are introduced next year.

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The dreaded 'tap tax' is set to hit homeowners with a €370 bill when it is introduced in the next budget. This is on top of the estimated €330 payment for a full year of the property tax.

These austerity measures alone means families will lose €13-14 per week and comes amid hikes in PRSI and cutbacks to child benefit.

It's emerged today that the Government has told the Troika that it aims to raise €500m by rolling out water charges -- which will be applied to 1.35m homes across the country.

The IMF said in a statement: "The latest memorandum of understanding envisages the introduction of water metering, with a view to start charging by the end of the EU/IMF programme.

"Although the exact amount of budgetary savings will depend on the parameters of the charging regime -- for example the free water allowance provided to users -- the working estimate of the potential annual savings that could arise is €500m."

The statement gives the first indication as to how much families will pay for water.

The company established to oversee the roll-out of the charges, Irish Water, has yet to reveal when families can expect their first bill.

Coalition sources are adamant that the charges won't come into force until after the local elections, which will fall in April or May.

As a result of our agreement with the Troika, the Government must begin charging homeowners from 2014 -- however the exact date for when the first bills will be received is not clear.

The Government is planning to give each household a "free" yearly allowance of water -- which will cover basic needs like sanitation.